PRIMERICA LIFE INSURANCE EXAM
correctly answered to pass
A. mutual
funds not paid out after paying claims and other operating costs are returned to the policy
owners in the form of a dividend. if all funds are paid out, no dividends are paid - correct
answer ✔✔An insured purchased an insurance policy 5 years ago. Last year, she received a
dividend check from the insurance company that was not taxable. This year, she did not receive
a check from the insurer. From what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock
B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health problems -
correct answer ✔✔Following a career change, an insured is no longer required to perform many
physical activities, so he has implemented a program where he walks and jogs for 45 minutes
each morning. The insured has also eliminated most fatty foods from his diet. Which method of
dealing with risk does this scenario describe?
a. retention
b. reduction
c. transfer
,d. avoidance
A. an applicant submits an application to the insurer
in insurance, the offer is usually made by the applicant in the form of an application. acceptance
takes place when an insurer's underwriter approves the application and issues a policy - correct
answer ✔✔In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant
A. perils
perils are the causes of loss insured against in an insurance policy - correct answer ✔✔the
causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards
A. agents contract with the principal
the principal grants authority to an agent through the agent's contract - correct answer
✔✔what documentation grants express authority to an agent?
,a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
A. domestic
a company is domestic when doing business within the state in which it is incorporated - correct
answer ✔✔which of the following best describes an insurance company that has been formed
under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign
D. race
age, medical history, and sex provide sound statistical date for determining the probability of
loss. Race, religion, sexual orientation, etc. are the factors that cannot be used because there is
not sound statistical data to show that they effect the probability of loss; therefore, they are
considered to be discriminatory - correct answer ✔✔which of the following factors is NOT
considered by an underwriter when determining the premium rates for an individual seeking
insurance?
a. medical history
b. sex
, c. age
d. race
A. handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a trust capacity - correct
answer ✔✔in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds
B. express authority
express powers are written into the contract between the insurer and the agent - correct
answer ✔✔the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority
D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or
reject the policy as its written - correct answer ✔✔insurance policies are not drawn up though
correctly answered to pass
A. mutual
funds not paid out after paying claims and other operating costs are returned to the policy
owners in the form of a dividend. if all funds are paid out, no dividends are paid - correct
answer ✔✔An insured purchased an insurance policy 5 years ago. Last year, she received a
dividend check from the insurance company that was not taxable. This year, she did not receive
a check from the insurer. From what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock
B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health problems -
correct answer ✔✔Following a career change, an insured is no longer required to perform many
physical activities, so he has implemented a program where he walks and jogs for 45 minutes
each morning. The insured has also eliminated most fatty foods from his diet. Which method of
dealing with risk does this scenario describe?
a. retention
b. reduction
c. transfer
,d. avoidance
A. an applicant submits an application to the insurer
in insurance, the offer is usually made by the applicant in the form of an application. acceptance
takes place when an insurer's underwriter approves the application and issues a policy - correct
answer ✔✔In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant
A. perils
perils are the causes of loss insured against in an insurance policy - correct answer ✔✔the
causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards
A. agents contract with the principal
the principal grants authority to an agent through the agent's contract - correct answer
✔✔what documentation grants express authority to an agent?
,a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
A. domestic
a company is domestic when doing business within the state in which it is incorporated - correct
answer ✔✔which of the following best describes an insurance company that has been formed
under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign
D. race
age, medical history, and sex provide sound statistical date for determining the probability of
loss. Race, religion, sexual orientation, etc. are the factors that cannot be used because there is
not sound statistical data to show that they effect the probability of loss; therefore, they are
considered to be discriminatory - correct answer ✔✔which of the following factors is NOT
considered by an underwriter when determining the premium rates for an individual seeking
insurance?
a. medical history
b. sex
, c. age
d. race
A. handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a trust capacity - correct
answer ✔✔in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds
B. express authority
express powers are written into the contract between the insurer and the agent - correct
answer ✔✔the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority
D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or
reject the policy as its written - correct answer ✔✔insurance policies are not drawn up though
